Civil Action No. 03-5784.
October 21, 2004
MEMORANDUM AND ORDER
Currently before the Court are Defendant's Motion to Reconsider or, in the Alternative, Motion for Interlocutory Appeal (Docket No. 13), Plaintiff's Opposition thereto and Notice of Supplemental Authority (Docket Nos. 17 19), and Defendant's Motion for Leave to File a Reply Memorandum in Support of its Motion to Dismiss or, in the Alternative, Motion for Summary Judgment on Plaintiff's Complaint (Docket No. 18) which the Court interprets as Defendant's Motion for Leave to File a Reply Memorandum in Support of its Motion to Reconsider or, in the Alternative, Motion for Interlocutory Appeal.
In October 2001, Plaintiff George Joseph Crane ("Crane") telephoned a representative of Defendant American Home Mortgage Corporation ("American") to apply for a mortgage. Crane alleges that he asked for "the lowest possible interest rate for which [he was] qualified." Crane gave American his employment status and his social security number so that American could obtain his credit history and determine whether he qualified for a mortgage. After American had completed Crane's credit review a representative contacted Crane and informed him that he would not be eligible for American's "prime rate." According to Crane, he was told by American that he would have to pay an interest rate at least 1 percent higher than American's lowest mortgage rate if Crane desired to secure a mortgage with American.
Crane filed suit against American on October 17, 2003 alleging that American violated certain provisions of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., for failing to complete FCRA's adverse action notice requirements. These requirements state that whenever any person takes an adverse action with respect to a consumer that is based on information contained in a "consumer report," the consumer must be provided with notice of the adverse action as well as other information pertaining to the consumer report used to support the adverse action. See 15 U.S.C. § 1681m(a).
Plaintiff's initial complaint alleged that he was filing suit "on behalf of himself and hundreds, if not thousands, of persons who sought mortgage loans from Defendant." To this point Plaintiff has yet to file a motion to certify the purported class.
FCRA defines "consumer report" in part as:
any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for — (A) credit or insurance to be used primarily for personal, family, or household purposes. . . .15 U.S.C. § 1681a(d)(1).
Before filing an answer or undertaking any discovery, on January 5, 2004, American filed a Motion to Dismiss or, in the Alternative, Motion for Summary Judgment. In a Memorandum and Order ("MO") dated July 7, 2004, this Court denied Defendant's Motion to Dismiss or, in the Alternative, Motion for Summary Judgment on Plaintiff's Complaint. See Docket No. 11. In this motion Defendant asks the Court to reconsider its decision or, in the alternative, to certify an order for interlocutory appeal.
A. Motion for Reconsideration
The purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence. Max's Seafood Café by Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999) (citing North River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995)). A motion for reconsideration will only be granted if: (1) there has been an intervening change in controlling law; (2) new evidence, which was not previously available, has become available; or (3) it is necessary to correct a clear error of law or to prevent manifest injustice." Marjam Supply Co. v. BCT Walls Ceilings, Inc., 2003 WL 22006801, at *1 (E.D. Pa. Aug. 20, 2003); Wiggins v. Boston Scientific Corp., 1999 WL 200672, at *2 (E.D. Pa. Apr. 8, 1999).
"Because federal courts have a strong interest in the finality of judgments, motions for reconsideration should be granted sparingly."Continental Casualty Co. v. Diversified Indus., Inc., 884 F.Supp. 937, 943 (E.D. Pa. 1995). "Motions for reconsideration are not to be used to reargue or relitigate matters already decided." Haymond v. Lundy, 205 F. Supp. 2d 390, 395 (E.D. Pa. 2002). Nor are they intended as an opportunity for the losing party to raise arguments they neglected to include in previous briefs. See Haymond, 205 F. Supp. 2d at 396 ("Rule 59(e) motions are `aimed at reconsideration, not initial consideration.'") (quoting Federal Deposit Ins. Corp. v. World Univ., Inc., 978 F.2d 10, 16 (1st Cir. 1992) (emphasis in original)).
American's argument for reconsideration takes issue with the way in which this Court in its MO characterized the facts of the case. Whereas the Court stated that American took adverse action against Crane when it "declined to pre-qualify Crane for the loan at prime after reviewing his consumer report," see MO at 8, American asserts that, by Crane's own admission, Crane merely requested "the lowest possible rate for which [he] qualified." See Decl. of George Joseph Crane, ¶ 2, Ex. B to Pl.'s Opp. to Def.'s Mot. for Recon. (Docket No. 17). Arguing that because Crane did not request a loan at "prime" but instead was given the best loan rate he qualified for, American gave Crane "the information he or she specifically request[ed]." See Def.'s Mot. at 3-4. As such, American further argues that there is no legal basis for concluding on these facts that American took "adverse action" against Crane under FCRA.
American does not allege that there has been an intervening change in the controlling law, or that new evidence is available. Furthermore, American fails to raise any new issue in the instant motion that the Court did not already consider in issuing its MO. In the absence of a need to correct a clear error or prevent manifest injustice, American simply states that "for the purposes of its motion for reconsideration, defendant is requesting that the Court reconsider and/or clarify the basis for its decision with respect to [Crane's] factual circumstances."See Def.'s Mot. at 5.
Although it will not change the result of the Court's previous MO, to the extent that American seeks clarification the Court will take this opportunity to correct its mischaracterization of the facts of the case. Crane did not ask for a loan at American's "prime" rate; the Record indicates that Crane sought the best rate American could offer him based on his qualifications. The Court however remains of the opinion that the central issue in this case, whether American's conduct after Crane's loan request constituted an "adverse action" under FCRA, is a genuine issue of material fact precluding this Court from granting Defendant its Motion for Summary Judgment.
Although American asks for clarification, it includes in its motion many of the same arguments, supported by the same authority, that the Court reviewed in considering American's earlier Motion to Dismiss or, in the Alternative, Motion for Summary Judgment. The Court holds that, in addition to seeking clarification, American is "requesting the court to `rethink' a decision it has already made." Glendon Energy Co. v. Borough of Glendon, 836 F. Supp. 1109, 1122 (E.D. Pa. 1993). Therefore, although the Court is willing to clarify its MO as explained above, the Court will once again reiterate its decision on the merits of American's earlier motion and will deny American's current motion with respect to reconsideration.
B. Interlocutory Appeal
In general, the U.S. Court of Appeals for the Third Circuit has jurisdiction over final orders from this Court. See 28 U.S.C. § 1291. Section 1292(b), however, creates a narrow exception to the "final judgment rule" that permits a district court to certify an interlocutory order for immediate appeal. Pursuant to 28 U.S.C. § 1292(b), this Court must, in order to certify an order for interlocutory appeal, determine that:
(1) this Court's Order involves a controlling question of law;
(2) there is substantial ground for difference of opinion with respect to resolution of the issue to be appealed; and
(3) an immediate appeal from the order could materially advance the ultimate termination of the litigation.28 U.S.C. § 1292(b); Max Daetwyler Corp. v. Meyer, 575 F. Supp. 280, 282 (E.D. Pa. 1983).
The decision to certify an order for appeal under § 1292(b) lies within the sound discretion of the trial court. Fox v. Horn, 2000 U.S. Dist. LEXIS 3106, at *3 (E.D. Pa. Mar. 13, 2000). Certification is only appropriate in "exceptional" cases. Thornbury Noble, Ltd. v. Thornbury Twp., 2002 U.S. Dist. LEXIS 4698, at *60 (E.D. Pa. Mar. 20, 2002) (citingPiazza v. Major League Baseball, 836 F. Supp. 269, 270 (E.D. Pa. Oct. 14, 1993). In addition, a district court should be mindful of the strong policy against piecemeal appeals when exercising its discretion.Orson, Inc. v. Miramax Film Corp., 867 F. Supp. 319, 321 (E.D. Pa. 1994).
"Although the moving party is not required to demonstrate that an interlocutory appeal would certainly expedite the case, he should advance something more than mere conjecture that certification would substantially reduce time and expense." Id. In addition, a court should not grant a motion under § 1292 simply because a party disagrees with the district judge's decision. Meyer, 575 F. Supp. at 282. The Court must be aware that the purpose of § 1292 was to advance certain goals of appellate review, including resolving conflicts among trial courts on issues not normally open on final appeal and avoiding the waste of trial court time on unnecessary litigation. See Note, Interlocutory Appeals in the Federal Courts Under 28 U.S.C. § 1292(b), 88 Harvard Law Review 607 (1975).
Although American proposes four individual questions for certification, the central issue American seeks to have this Court certify for appeal is whether, in response to a consumer's pre-qualification request and based on a credit report, a mortgage company's offer of a loan rate at one percent higher than a rate available to a consumer with better credit constitutes an "adverse action" under 15 U.S.C. § 1681k(1)(B)(iv).
Under FCRA, the term "adverse action":
15 U.S.C. § 1691 states, in pertinent part:
the term "adverse action" means a denial or revocation of credit, a change in the terms of an existing arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested.
(B) means —
(i) a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable insurance, existing or applied for, in connection with the underwriting of insurance;
(ii) a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee;
(iii) a denial or cancellation of, an increase in any charge for, or any other adverse or unfavorable change in the terms of, any license or benefit described in section 1681b(a)(3)(D) of this title; and
(iv) an action taken or determination that is —
(I) made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a review of an account under section 1681b(a)(3)(F)(ii) of this title; and
(II) adverse to the interests of the consumer. 15 U.S.C. § 1681a(k)(1). This Court held that Crane's phone call to American seeking to obtain pre-qualification for a mortgage loan was a transaction within § 1681a(k)(1)(B)(iv)(I). In addition, the Court held that American's failure to offer Crane their "prime" rate after reviewing Crane's consumer report constituted an "adverse action" under (1)(B)(iv)(II). In other words, the Court concluded that under FCRA's "catchall" provision contained in § 1681k(1)(B)(iv) and based on the limited Record before the Court, Defendant's summary judgment motion had to be denied.
As noted above, in this MO the Court is clarifying its mistaken use of the word "prime" in its characterization of Crane's loan request. Crane did not ask for American's "prime" rate but simply the best rate for which he was qualified. This clarification does not alter the "adverse action" analysis discussed herein. Whatever Crane requested of American, there remains a genuine issue of material fact as to whether American's conduct constituted "adverse action" under FCRA.
American contends in its motion that the Court applied the wrong definition of "adverse action" in this case, and that this application presents an issue that warrants certification for interlocutory appeal under § 1292(b). Because the Court holds that the issue does not meet the first of the three requirements set out in § 1292(b), it is inappropriate to grant American's Motion to Certify Interlocutory Appeal.
This Court's MO that American asks for certification to appeal does not involve a controlling question of law. A question is "controlling" if error in its resolution would warrant reversal of a final judgment or dismissal. See Katz v. Carte Blanche Corp., 496 F.2d 747, 755 (3d Cir. 1974), cert. denied, 419 U.S. 885 (1974). The legislative history of § 1292(b) indicates that the Court should only in rare circumstances hold that a controlling question of law is at issue and is ripe for interlocutory appeal. The report of the Committee on Appeals from Interlocutory Orders of the District Courts, submitted to the Judicial Conference of the United States on September 23, 1953, stated:
It is not thought that district judges would grant the certificate in ordinary litigation which could otherwise be promptly disposed of or that mere question as to the correctness of the ruling would prompt the granting of the certificate.See S. Rep. No. 2434, 85th Cong. 2nd sess. (1958), reprinted in 1958 U.S.C.C.A.N. 5255, 5260; see also United States Rubber Co. v. Wright, 359 F.2d 784, 785 (9th Cir. 1966) (discussing legislative history of § 1292(b)).
As stated above, American argues that the "catch-all" definition of "adverse action" that the Court used to deny American's Motion for Summary Judgment was the wrong definition for the Court to apply in the context of a credit transaction. American asserts that the definition set out in § 1681k(1)(A) is the only definition applicable to the credit context, and that under that definition Plaintiff has not sustained an adverse action at all. However, even if Defendant's reading of the statute is correct — in other words, if the Court erred in its interpretation and application of FCRA — a reversal by the court of appeals would not warrant dismissal of Crane's complaint. At this stage of the case — before discovery and before the parties have actually clarified the facts surrounding Crane's pre-qualification application — even a reversal by the Third Circuit would not end the litigation. As such, the issue American seeks certification for is not "controlling" and therefore does not justify certification for interlocutory appeal.
As an example of facts that have yet to be discovered and would preclude dismissal of Plaintiff's complaint, it is not yet clear to the Court what exactly Crane requested over the phone with American. At this point we take as true, for the purposes of these motions, that Crane asked for "the lowest possible rate for which [he] qualified" based on Crane's declaration attached to his Complaint. However, American has the ability to counter this allegation. Given that 15 U.S.C. § 1691(d)(2)(B)(6) defines "adverse action," in part, as "a refusal to grant credit in substantially the amount or on substantially the terms requested," until the Court is clear on what terms were "requested" Plaintiff's claim cannot be dismissed under 12(b)(6) or on summary judgment.
Because the first requirement of § 1292(b) has not been met American's Motion for Interlocutory Appeal is denied.
An appropriate Order follows.
AND NOW, this day of October, 2004, upon consideration of Defendant's Motion to Reconsider or, in the Alternative, Motion for Interlocutory Appeal (Docket No. 13), Plaintiff's Opposition thereto and Notice of Supplemental Authority (Docket Nos. 17 19), and Defendant's Motion for Leave to File a Reply Memorandum in Support of its Motion to Dismiss or, in the Alternative, Motion for Summary Judgment on Plaintiff's Complaint (Docket No. 18) which the Court interprets as Defendant's Motion for Leave to File a Reply Memorandum in Support of its Motion to Reconsider or, in the Alternative, Motion for Interlocutory Appeal, IT IS HEREBY ORDERED that:
Defendant attached to its Motion for Leave to File a Reply a document titled Reply Memorandum of Law in Support of Defendant's Motion to Reconsider or, in the Alternative, Motion for Interlocutory Appeal. Because the Court granted Defendant's Motion for Leave to File a Reply, the Court considered the arguments set forth in the Memorandum of Law in reaching the decision addressed in this Order.
(1) Defendant's motion for leave to file a reply is GRANTED.
(2) Defendant's motion to reconsider is DENIED;
(3) Defendant's motion for interlocutory appeal is DENIED.